The tax code is too big for small business. That’s the message a coalition of small businesses sent Wednesday to the Joint Economic Committee of Congress on the day of nation’s tax deadline.
“The single greatest obstacle to growing my business in the long term is the uncertainty surrounding our tax code,” said Jody Fledderman, CEO of Batesville Tool and Die in Batesville, Ind.
Fledderman was joined in testimony by Thomas A. Hoghaugh (is this spelling cq?), who runs both Singus Medical and LockDown Surgical in Chanhassen, Minn. The two small-business owners complained that the tax code increases administrative costs and leaves small business owners perplexed when certain tax credits expire, leaving tax liabilities to rise without warning.
The hearing was president over by Sen. Dan Coats, R-Ind., who said Republicans who control both chambers of Congress now hope to revamp the tax code.
“Tax Day is a perfect time to commit to not let another April 15 pass before we finally tackle comprehensive, pro=growth tax reform,” he said at the hearing’s start. “And while it is urgent and essential to lower our corporate tax rate … we must not forget the millions of small businesses” nationwide.
In front of the panel, Hoghaug called on Congress to repeal the medical device tax, a 2.3 percent excise tax that he said threatens to cripple both of his businesses.
“This is a tax on innovation,” he said. “This is not sustainable for any business, large or small.”
In a survey this year, the National Small Business Association found that on average small companies spend 80 hours and $10,000 a year complying with the tax code. About 85 percent of the more than 675 businesses surveyed hired outside tax help and 67 percent said federal taxes either moderately or significantly affected daily operations.
Committee member Rep. Carolyn Maloney, D-NY, worried where the fine line is in distinguishing between Mom-and-Pop businesses and smaller-sized firms that still have large, international assets.
“One of the biggest challenges in crafting tax policy for small businesses is deciding what counts as a small business,” she said. “Is a global law firm with dozens of offices around the world a small business? Is a hedge fund with billions in assets a small business?”
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